Bridge loan: Everything you need to know

A bridge loan is a form of financing that can be used to acquire a new investment property before selling the existing one.

Bridge loans are a good option for those who need funding quickly and have existing equity in another property. Many people are not aware of the Bridge loan option, which can be a helpful way to overcome short-term financial difficulties.

In this post, we will discuss the Bridge loan in detail, explain what they are and how they work.

How Does a Bridge Loan Work?

If you are looking to buy a new investment property, bridging loans can be an ideal way to help secure funding for the new investment property without having to sell or wait for a sale on an existing one. By using a bridging loan you can secure funds based on current equity held in an existing investment property, and then use these fund to purchase the new one.

This can help speed up the purchasing process and secure the investment property quickly. With standard mortgages and loans there can be a myriad of forms and processes to complete before you would even be considered for a loan, by which time the property may be sold to someone else. 

A bridge loan is a short-term loan that can be used to help cover the costs of purchasing an investment property. The terms of the loan are usually between three and twelve months long, although some lenders will option to roll up and extend the existing loan if required.

If you are looking to take out a bridge loan, it’s important to know the terms and conditions of the loan in order to qualify. The loan-to-value ratio is typically 70%, so if the investment property doesn’t have at least 30% equity, you may not be able to get enough money from this type of financing. It is also recommended that you use a bridging calculator in order to see what the final repayment would be and whether or not you would be eligible for a loan.

Interest charges on a bridging loan

Bridging loans are a type of loan that has slightly higher interest rates than average due to the short repayment period. However, this rate will vary between lenders. When considering how much time is saved in terms of the application process for investment properties development by getting one might make up for it altogether. Bridge Direct are direct lenders and not brokers, cutting out the middle man, meaning they can offer instant decisions on all of their Bridging Loan services.

What are the benefits of a bridge loan?

A bridge loan is a short-term loan that can help you overcome short-term financial problems. Some benefits of using a bridge loan can include:

Easy access to funding – Bridge loans are a solution to your short-term financing needs. They can be a convenient way to get the funds you need when you don’t have time to wait for a traditional loan approval process.

Buy a new investment property – A bridge loan could allow you to purchase a new property before selling an old one. This type of loan can be very helpful if you are facing short-term financial problems and need to quickly purchase an investment property in a sought after area.

Quick and affordable funding – A bridge loan is a short-term solution for accessing quick and affordable funding.

It’s not an issue if your credit score is bad – If you are unable to qualify for a traditional loan because of your credit history, a Bridge Loan can be a possible alternative solution. As long as you have enough equity in an existing property to secure the loan, you are eligible for this type of financing.

Bridging loan calculator

A bridging loan calculator can be a helpful tool in determining how much money one is able to borrow, how much interest will be paid back and over what period. A bridging calculator should take into account all property values as well as mortgages and charges against the current properties. Using a bridging calculator like this should allow you to see what you would potentially be able to borrow against how much and across what period you would expect to pay it back.

How do I get a bridging loan in the UK region?

If you are looking to secure a short-term bridging loan, online searching can be time-consuming and stressful. There are many brokers online who offer great deals, however, many of these businesses are brokers and not direct lenders, which can lead to additional time and costs being added to the loan. By approaching a direct lender, you can cut out the middle man and so accruing these additional costs. Bridge Direct is a direct lender that lends to businesses throughout the UK. If you have adverse credit, Bridge Direct may be able to help you obtain a loan, as each and every deal is assessed on its own individual merits.

Bridge Direct has a long history of providing successful bridging loans to businesses,here are just a few of the reasons why people return to Bridge Direct for their Bridging Loan solutions:

  • Loans from £30,000 to £3 million
  • Speak to the decision maker
  • 1st & 2nd charges available
  • Each deal assessed on its individual merits
  • No set criteria
  • No middle men – direct access to funds
  • Instant decisions with no credit search required
  • No proof of income required
  • Adverse credit considered
  • Interest rollup available

How to apply for a bridge loan

Visit and fill out the form to get a free instant decision on your loan request or you can contact a decision maker directly by calling on 020 3126 4969.

Contact Bridge Direct

You can contact bridge direct in many ways, you can contact us directly using the contact details below;

 020 3126 4969

Alternatively, fill in the contact form below and one of our decision makers will contact you shortly to help you.